Children's savings or Lifetime ISA?

RicFlair

Hi all,
About to start saving for my daughter and been looking at savings accounts. I reach age 60 around the time she will be able to access any money from this, so it got me thinking.
Does it make sense to open a Lifetime ISA in my name to get 25% interest a year (up to £1k) and then withdraw at 60 and give to her? Surely there must be something I'm missing, otherwise loads of people would be doing this.

Thanks in advance

Alexland

It's a 25% bonus (not interest) so you only get it once for each contribution. Cash LISAs pay a low rate of interest but for 20+ years then a S&S LISA would be more suitable and you would hopefully get above inflation investment returns on both the contributions and bonuses.
In terms of the kids our ages line up so that's what we are doing with our S&S LISAs investing money we intend to gift to our children from their early 20s for house deposits, etc. Unfortunately they will likely have university costs before we are 60 which will be at least part paid from our S&S ISAs and/or their S&S JISAs.
If you are a higher rate taxpayer it's also worth considering making extra pension contributions to make gifts from the tax free lump sum although beware that there is a government consultation that might cause your pension access age to be delayed.

RicFlair

Thanks mate. I think a s&s shares LISA will be the answer for me then. Just wanted to make sure there wasn't anything obvious I was missing! Thanks again